U.S. Overscreened? Not For Mega-Hits

Major exhibitors say that the nation’s 23,000 screens may amount to too much of a good thing. But if “overscreening” is now the bane of the exhibition business, more leggy megahits like “Ghost,” “Home Alone” and “Pretty Woman” will be its salvation, executives agree.

“Overscreening allows us to play all the pictures that come into the marketplace,” says Michael Patrick, the expansion-minded president/CEO of the 975-screen Carmike chain. “We had enough pictures to fill the seats, but they didn’t tickle the public’s fancy.”

Although 1990’s cumulative $5 billion boxoffice mark was second only to 1989’s “Batman”-boosted $5.03 billion, theatrical profits paled beside studio rentals. Many chains saw their income decline as putative blockbusters like “Another 48 Hrs.,””Dick Tracy” and “Days Of Thunder” fizzled quickly after big openings, while touted films like “Havana” never got off the ground. But exhibitors remain optimistic about their “partnership” with Hollywood.

“We have a lot of faith in the studios,” says Frank Stryjewski, v.p. of operations resources for the 1,628-screen American Multi-Cinema chain.

Interviews with key exhibitors before the Showest convention found a consensus on the big issues:

* The building boom of the ’80s is over, but some chains will continue cautious strategic expansion, even as they unload unprofitable screens.

* Screen saturation has intensified competition, but a welcome upsurge in production means there will be more movies to go around.

* Keenly aware of soaring production and marketing costs, exhibitors are reluctant to ask their “partners” in Hollywood for a change in the boxoffice split, which favors distributors’ rentals on the front end.

* Theater owners are encouraged by the emergence of sleeper blockbusters and the apparent readiness of Hollywood to move away from an over-reliance on sequels and bloated-budget action pics.

* Revolutionary technologies, such as satellite transmission of prints, are more likely to emerge toward the end of the decade, but the new ownership of studios by Japanese hardware giants may accelerate developments.

* People will continue going out to the movies, even as home entertainment alternatives become more sophisticated.

* Most chains will take a cautious approach to the NC-17 rating, evaluating adults-only releases on a film-by-film and region-by-region basis.

While 1991 shapes up as an economically turbulent year, exhibitors are confident they can ride it out.

“In general, the outlook for moviegoing has never been better,” says William Kartozian, president of the National Assn. Of Theater Owners. But Kartozian notes that exhibitors have never experienced “a recession where there are so many home entertainment alternatives” for moviegoers. To retain their audience, exhibitors must offer “service, product and real value to their patrons,” he says.

Who’s afraid of homevideo?

Exhibitors are convinced they have taken home entertainment’s best competitive shot, and are stronger for it.

“Homevideo has made people more movie-literate and has made moviegoing more important,” says Allen Karp, president/CEO of Cineplex Odeon.

“We not only have survived television, but the impact of cable and video as well,” says A. Alan Friedberg, chairman of Loews Theaters. “We’re optimistic about the future. There’s nothing like the experience of going out to a theater.”

The future, says Kartozian, will belong to “a new generation of theaters,” the era of the “superplexes.”

While “some markets are overscreened,” others are not, the NATO chief believes. “As in any kind of service or retail business, the new will push out the old.”

Exhibitors are continuing to expand, albeit at a much slower pace than they did in the ’80s.

* American Multi-Cinema (1,628 screens) added 16 screens last year and will add “about the same” in 1991. “We’ll build where it makes strategic sense,” says Stryjewski.

* General Cinema (1,504 screens) added 127 screens last year and will open 39 more in 1991. According to Peter Farwell, v.p. of corporate relations, GC originally projected growth to 1,800 screens, but revised that downward to the present level “because of overscreening and competition.” GC, which posted a operating loss of $41.1 million (including a $34 million restructuring charge) for the quarter ended Oct. 31, has slashed jobs and consolidated its field operations. “The industry is not healthy,” says Farwell.

* Carmike Cinemas (975 screens) added 274 screens last year and will add 100 or more this year. CEO Patrick says he’s raised $75 million for acquisitions.

* Loews Theaters (868 screens) added 57 screens last year and plans to build 440 over the next three years, says chairman A. Alan Friedberg. “We’re only into [expansion] deals that make sense economically and strategically. We aren’t into the numbers game,” he says.

* National Amusements (670 screens) added 50 screens last year and would like to do the same in 1991. “We have a slow-growth philosophy,” says chairman Sumner Redstone.

Exhibition honchos stress that their business ultimately will rise or fall on the popular appeal of new movies. “The play’s the thing,” says Friedberg. “What counts is on the screen,” Redstone concurs.

Exhibitors hope that the new production boom will yield more hits.

“This year there will be more pictures on the screen, but it’s the quality that makes the bottom line,” says Jon Krier, president of Exhibitor Relations Co.

“More product will help,” says Karp. “You’ll see more films failing, but there will be more succeeding, too. I’m hopeful we’ll start seeing pictures with stronger legs.”

Limp-legged, front-loaded pics hurt exhibs in the pocketbook last year. Is now the time to ask distributors to revise the way boxoffice is split?

Karp notes that over the past five years, the exhibitor’s share has “substantially” shrunk on the average from 55%-65% to 40%. On the other hand, he notes, “Costs are pressuring the studios.” Exhibs tend to be philosophical about the ups and downs of the rentals game.

“Sometimes it’s hard to get a fair shake when the gross isn’t there, but when you have a relationship with a company that has a film with legs, you can make up your losses,” says Lightstone.

“It’s not a good time to press distributors to cut film rentals,” says Redstone. “Hypothetically,” adds Friedberg, “it’s an appropriate request to make.” But the Loews topper says it’s more realistic for exhibitors to hope that Hollywood has “more ‘Home Alones,’ ‘Pretty Women’ and ‘Ghosts’ in the mix” this year.